Haleon To Buy Addl. 33% Stake In China JV, Totaling 88%

(RTTNews) - Haleon Plc (HLN, HLN.L), a British consumer healthcare company, announced Friday that it has entered into an agreement to acquire an additional 33 percent equity interest in its joint venture in China, Tianjin TSKF Pharmaceutical Co. Ltd., for a total consideration of RMB 4.47 billion or around 0.5 billion pounds.

The acquisition will increase Haleon's stake in TSKF to 88 percent from 55 percent, and deliver greater control and increased strategic and operational flexibility across the business.

The shares were bought from its JV partners, Tianjin Pharmaceutical Group and Tianjin Pharmaceutical Da Ren Tang Group Corp. Ltd. or DRTG. The deal includes the entire 20 percent equity interest in TSKF held by TPG and a 13 percent equity interest in TSKF held by DRTG.

Subject to customary closing conditions, including the approval of DRTG's shareholders and applicable regulatory clearances, the transaction is expected to close end of 2024 and to be accretive to earnings per share.

In addition, effective from the deal closure, Haleon would have an option to acquire and DRTG an option to sell the remaining 12 percent shareholding in TSKF.

TSKF, which manufactures and distributes brands such as Fenbid, Voltaren and Bactroban, accounted for around 40 percent of Haleon's China revenues in fiscal 2023.

The company expects to fund the acquisition through a combination of Haleon's existing cash resources and new third-party Renminbi-denominated debt.

Brian McNamara, Chief Executive Officer of Haleon said, "China is a key strategic market for Haleon. Over the last three years, it has delivered strong market share growth and our acquisition of a further 33 percent in our JV partnership is an important milestone which is both strategically and commercially compelling."